Real Estate Lessons Learned Or Lost?
Author: Charles Feldman • URL: http://www.thefeldmanblog.comMay 7th, 2008 •
Will we ever learn? Doesn’t look like it.
You’d think what with all that has gone down with the subprime mortgage/credit mess, the real estate industry (or, at least, segments of it) would be in the forefront of a much needed reform movement.
Instead, there seems to be an almost pathological desire to return to “normal” as soon as possible.
While it is certainly true that people all over the country are finding it difficult to obtain mortgages–even people with good credit ratings, hardly a week goes by when I don’t read a newspaper ad or hear a radio commercial that tells would-be home buyers that they can get a mortgage even with rotten credit, the very thing that go us into this ordeal in the first place!
Since most people with bad credit are finding it nearly impossible to get reasonable mortgages, it is baffling about why some places are advertising that they can?
I don’t have a good theory on what they might be up to and would be interested in informed opinions (as opposed to speculation, please) as to why this may be the case?
Regardless, it is discouraging that it took so little time for these potentially abusive practices to resurface.
It is understandable that Americans want to see the light at the end of the tunnel. But, things just aren’t that simple I’m afraid.
When Fannie Mae on Tuesday issued what Reuters calls “reassuring comments about the credit and housing markets” the stock market took notice and went up…investors eager for any bit of positive news they can find.
But, it would be foolish not to take note of the other bit of news Tuesday: a barrel of oil went above $122 for the first time!
Another dose of reality comes by way of Las Vegas. Yes, I said Las Vegas.
According to the New York Times, Vegas is starting to feel the pain caused by the real estate/credit crisis. The city way overbuilt based on an economic model that just doesn’t hold up anymore. The prospects are apparently not very good that the city will quickly rebound,either.
It is more than okay for real estate and potential real estate investors to reach for optimism, so long as they keep their eyes open to what is really going on in the world around them.
If you're new here, you may want to subscribe to our RSS feed or sign up for our real estate social network. Thanks for visiting!
Tags: Economy, las vegas, loans, mess, mortgage, Mortgages, real estate, subprime, subprime crisis
Joshua Dorkin
Charles Feldman
Ted Karsch.
Troy Schuricht
Richard Warren
Jim Watkins
Just a comment on Las Vegas. Year over year home sales were up for the fourth consecutive month and inventory is holding steady. Considering the number of foreclosures, in is good to see that the inventory numbers aren’t increasing. The real estate agents that I know tell me that they are busier than they have been at any time since the market imploded. I believe that Vegas will rebound fairly well since we are still experiencing strong population growth with many jobs being created in the next two years. Rents are rising and the demand for rental housing is increasing since people are unable to buy homes as easily as they once did.
Nice article, and perhaps the money quote is the final paragraph.
It’s imperative that investors truly do keep their eyes open to what’s happening in a market, Vegas being a great example. Respecting what Rehab702 has posted, the PMI Group’s Market Risk Index for Vegas is 91.9, measures of affordability are very poor for single family in the market relative to median income measures, unemployment has crept up to 5.6%, and annualized nonfarm employment growth in the MSA has gone negative (-0.3% March 08). Based on that data, I’d agree with Charles that things look pretty sober in Vegas (no pun intended) right now, and recovery isn’t going to happen overnight.
Understanding what’s happening in your market(s) of interest is truly an essential these days.
We are seeing good business come to our agents in Las Vegas. They have been reporting on the downturn in Las Vegas for awhile now, but there are opportunities in every downturn, and people still like to live and play in Vegas.
To the rest though, it is good to make an informed decision based on local information.
For every business there is always time of good and bad…Also, for property industry, I’m very sure that everything will be back to normal on its time.
I believe that Vegas will rebound fairly well since we are still experiencing strong population growth with many jobs being created in the next two years. Rents are rising and the demand for rental housing is increasing since people are unable to buy homes as easily as they once did.
To the rest though, it is good to make an informed decision based on local information.
apply for bad credit student loans
In the last week, I have been focusing on settling a number of matters before I go east for a few days for the Horatio Alger ceremony. I’ ve been working on my speech, which will contain lessons learned during my lifetime and which are important for …